Almost 42,000 people (41,938) claimed a previously deferred State Pension in 2023/24, receiving higher weekly payments for postponing, according to figures obtained by Royal London via a Freedom of Information (FOI) request. However, that figure was down by over a fifth (22%) on the previous year when 54,037 deferred pension claims were made.
According to the data, one in four pensioners (10,656 individuals) had postponed their State Pension for five years or more. It also emerged that 4,435 had delayed by ten years or more. The average deferral rate stood at four years, giving those who deferred for this length of time up to approximately £50 extra a week.
Delaying or deferring a State Pension means an individual has chosen not to claim their State Pension when they reached state pension age, currently 66.
The State Pension increases by 1% for every nine weeks someone defers, or 5.8% a year. However, people who delayed taking their State Pension before the new State Pension was introduced on 6 April 2016 were entitled to a more generous rate of 10.4% extra a year, and they received this uplift for as long as they delayed.
There were 591 people who hadn’t claimed their State Pension 20 years or more after they were entitled to receive it.
Some retirees claiming their State Pension for the first time in 2023/24 had delayed for more than three decades. The FOI revealed the average length of the 25 longest deferred claims was 32 years.
These ‘super-postponers’ initially became eligible for their State Pension during 1991/92, when the qualifying age was 65 for men and 60 for women. In theory, the majority of these individuals would now be in their 90s, with some potentially exceeding 100 years of age.
People delay claiming their State Pension for two reasons: to receive extra income from their State Pension when they claim or to reduce the amount of taxable income they’re currently receiving. This means that putting off claiming the State Pension can be a better option for someone who’s a higher rate taxpayer.
However, while delaying claiming can lead to significantly higher weekly payments later on, people choosing to delay claiming under the current system may not live long enough to recoup the money they missed out on, especially if they are basic rate taxpayers.
For example, someone deferring for one year from January 2026 would receive payment of £243.60-a-week in 2027 plus any triple-lock boosts along the way, meaning they’ll receive £694.72 extra per year (before triple-lock boosts). However, for the year they deferred, they will have missed out on almost £12,000 of State Pension, assuming they were entitled to the full new State Pension.
If you are a basic rate taxpayer and delay receiving the State Pension for one year, then you’d need to live until you were approximately 82 to see the benefit of delaying. For someone with taxable earnings over £50,270, then you’d only need to live until you were 79.
Sarah Pennells, Consumer Finance Specialist at Royal London said: “With the State Pension age now at 66 and due to start rising to 67 from April, many people are only too keen to claim their State Pension. However, our figures show that some people, for whatever reason, are delaying getting their State Pension payments. The numbers deferring in 2023/24 have fallen quite dramatically from the previous year, which could be because fewer pensioners are able to manage without the State Pension. However, with the new State Pension expected to rise to just below the personal allowance from April, we could see an increase in the numbers of people with other forms of income deferring, as they look to reduce the income tax they pay.
“If you’re thinking of delaying claiming your State Pension, then it’s a good idea to assess whether it is right for you. Getting the extra money may look attractive, but you are giving up the right to receive any State Pension payments until you stop deferring, and it could take years to see the benefit. The less tax you pay, the less worthwhile delaying might be.”
“If someone defers their pension and then dies, their surviving spouse or civil partner will only receive the extra pension if the person who deferred reached State Pension age before 6 April 2016. These figures highlight why it’s so important to think carefully before making this decision.”
Advantages of deferring your State Pension
Higher weekly payments: For every year you defer, your State Pension increases by 5.8%, giving you a bigger income later in life.
Bigger annual increases: Because annual increases apply as a percentage of what you’re already receiving, a higher starting amount means larger annual increases.
Tax savings: If you’re still working at State Pension age, then it’s likely you will pay income tax on your State Pension if you draw it in addition to your salary or earnings. Deferring can help reduce your tax bill by avoiding extra income during your peak earning years.
Disadvantages of deferring your state pension
You may never break even: No one knows how long they will live and deferring your State Pension may mean you never make up the money.
Less money now: Deferring means giving up income you could use today, which may affect your lifestyle or savings.
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